Small businesses support national health insurance

Survey of small and mid-sized businesses

National Small Business Association
Conducted March 27 - April 1, 2007
Glen Bolger and Nicole McCleskey, Public Opinion Strategies

Employee Benefits and Labor Issues

4. The number of companies offering no benefits at all has increased from 2000.

In 2000, 24% of companies surveyed offered no employee benefits. In the current survey, 30% of companies surveyed offer no benefits at all. This includes a significant drop over the last several years in the number of companies offering health benefits:

% Companies offering health benefits

1995 67%
2000 51%
2007 41%

5. Companies have made changes in their health benefit programs in response to high costs.

While most companies are trying to get by without taking cost-cutting measures to health care benefits, over one-third (37%) have taken some cost-cutting action.

It is the larger companies in the survey (20 or more employees) who are taking the more drastic action (possibly because they are more likely to offer health care benefits). In fact, 69% of these companies have taken cost-cutting steps that include: increasing employee contributions (37%), changing insurance companies (27%), instituting wellness programs (26%), and changing to policies with higher deductibles (26%).

Public Policy

10. Businesses express strong support for health care reform, but reject a government mandate for businesses to provide it for their employees.

Seventy-one percent (71%) of businesses support the following health care reform positioning:

Require that every individual in this country secure a basic health care package. To assist with this, insurance companies would be required to offer coverage to people with pre-existing conditions, and individuals and families would be provided with federal financial assistance to pay for health care premiums, based on income.

But businesses entirely reject a mandate on businesses to provide coverage. An equal number oppose the following proposal (71%), including 50% who strongly oppose it:

A requirement that all employers must provide health insurance benefits to all employees.

Presented an alternative that does not rely so heavily on business, those surveyed would prefer a “federally funded, government administered health care system financed through higher taxes.” Overall 60% favor this proposal, although the intensity of support is more tepid (29% strongly favor).

11. Asked what issues they would like to see the presidential campaigns address, the tax burden and health care costs top the list.

Overall, 31% of those surveyed want the presidential campaigns to address the issue of the tax burden on American businesses. This is a particularly critical issue to Republican business respondents, but also tops the list for Independents.

Thirty percent (30%) of respondents say health care costs is the most important priority. This was the biggest concern for Democrat respondents, and in a close second position among Independents.

Comment:

By Don McCanne, MD

Small businesses have been struggling with the costs of health insurance, and the problem only grows worse. In fact, in the past 15 years, the percentage of small business owners even offering health insurance to their employees has dropped from two-thirds to two-fifths.

Therefore it is no surprise that 71 percent of small business owners oppose a government mandate on employers to provide health coverage (employer mandate). In contrast, 71 percent are quite willing to support a government mandate that would require their employees to purchase their own insurance (individual mandate), with income-based government subsidies. Small business owners concede that the government must assist with the funding of employee health care coverage.

A clear majority, 60 percent, also would support “a federally-funded, government administered health care system financed through taxes in which everyone has health care coverage for all medically necessary treatment and procedures.”

The problem with an individual mandate is that private insurance policies that would provide adequate financial protection in the face of medical need are no longer affordable for the large number of average- and low-average-income individuals. These are the individuals whose incomes are above the thresholds that would qualify them for government subsidies, and they are also the individuals who are concentrated in the small business employee sector.

Most employers really do care about their employes and would likely reject the individual mandate if they realized how ineffective it would be. Even for those employers who are less altruistic, the prospect of having to pay higher salaries to cover employees’ costs for the individual mandate would likely be off-putting.

What employers really do want is an equitable method of financing health care for their employees. By far the most equitable method would be a common risk pool funded by progressive tax policies. A majority of small business owners already accept this, but if they understood that an individual mandate is clearly not the solution they seek, the support for national health insurance would be even greater.